The Volcker Diversion

No banking rule can protect against a credit mania fueled by bad policy.

February 20, 2012

Could even Paul Volcker draft a Volcker Rule? Team Obama and Democrats in Congress couldn't figure out how to turn his sensible idea—prohibiting banks from gambling with taxpayer money—into law. Now Mr. Volcker seems to be acknowledging that federal regulators can't draft a Volcker Rule either, at least not without help from the same bankers who will be subject to it.

As the public comment period ended this week on the draft federal rule to prevent commercial banks from trading for their own account, Mr. Volcker submitted...